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The worst financial managers

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Dear friends,

Well, I can’t say I’m surprised.

Ontario Finance Minister Charles Sousa released his fall economic update Nov. 26. According to Sousa, this year’s provincial budget deficit will be about $1 billion less than expected.

Back in April, he said it would be $8.5 billion. Now he says it will be $7.5 billion.

Good news? Not really. Not at all, in fact.

The extra billion dollars came from one main source: the Liberals sold off 15 per cent of Hydro One.

As our Financial Accountability Officer said a few weeks back, this is a money loser. Sure, there’s a short-term financial gain. But it’s a trade-off for long-term pain. That’s because Hydro One, which carries 97 per cent of all our electricity on its lines, earns a lot of money. And when you sell a money-earning asset, or part of it, you lose the income from that asset.

I can make money selling the car I use to get to work and feel rich for a few days after. But once I’ve spent that money, what’ve I got? No car. No job. No money.

That’s how Charles Sousa is running the province’s books. 

You may have heard that the Liberals were going to use money from the Hydro One sale to build new public infrastructure – transit especially. That didn’t happen. All the money went to the deficit. The Liberals want to be seen as capable, prudent money managers.

They aren’t. By one measure at least, these Liberals are our worst money managers in a century.

Here’s what I mean: Ontario got a public electricity system in 1906. For the next 90 years, we went through some tough economic times. But we didn’t sell our public hydro.

We went through the Great Depression. World War Two. The “stagflation” of the 1970s. Free trade, and the deep recession that followed it.

Through all these crises, we kept hydro public. We kept it as a not-for-profit public service, and it served us well. We had affordable electricity for our homes and businesses, and Ontario prospered. We had affordable electricity for our schools and hospitals, and life got better – for everyone.

Nowadays, though, our government doesn’t care about everyone. Just about every public service is in crisis, from correctional services to home care to everything in between. Frontline public employees have seen their wages pushed down and their benefits attacked. And millions of workers across the economy can’t get the decent work and wages they need to support their families.

The only people this government seems to care about are investors. Guided by ex-banker Ed Clark, Kathleen Wynne’s Liberals want to turn everything – even our hospitals – into a profit opportunity.

This is not smart. Privatization isn’t the solution to our fiscal woes – it’s one of the main causes. Every time we contract out a service or sell a public asset, we lose.

So when Charles Sousa says our finances are better off than they were, well, they’re not.

I can’t say I’m surprised.

In solidarity,

Eduardo (Eddy) Almeida
First Vice-President/Treasurer, OPSEU

For more information on the fall economic update, read the excellent analysis from the Canadian Centre for Policy Alternatives.

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